A Discussion on the Burnsville Real Estate Market
To The Burnsville RotaryRichard Tucker
Coldwell Banker BurnetOctober 5,2009
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Or. . .
What happened to your Real Estate values
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Where are we
How did we get here
Where are we going. . .
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Multiple factors lead to shiftHistorically low interest rates
Strong economy
“New” mortgage products
Little or no money down
Looser standards
No Doc loans
Pic and Pay loans
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Limited supply & strong demand
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Home prices w
ent up
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As prices w
ent up so did in
ventory
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Too much supply & reduced demand
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Historical average sales price appreciation
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So where are we today. . .As prices dropped
Buyers decide to wait and watch
Values dropped below mortgages amounts
Adjustable mortgages reset
Foreclosures increased
Creating a downward spiral
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Market forces begin to workLower prices induce first time homebuyers to
act.
Tax credit is a great incentive
Sellers re-think time to sell
Inventory begins to drop
Sales begin to pick up
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Where are we going now?Prices are beginning to stabilize in
the lower price ranges New listings Last week Pending Last
week
0- 100 6 9 18 11
100-200 65 61 74 56
200-300 52 39 39 33
300-400 19 21 11 10
400-500 9 16 8 4
500-600 2 8 3 2
600+ 3 2 0 0
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Many factors will impact the recoverySales are up
but not in all price ranges
Continued reduction in inventoryWe may see more foreclosures
Impact of the tax credit
Over reaction to credit marketsUnintended consequences to some needed changes
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ConclusionsPrices went up and were unsustainable Traditional market forces reactedCredit markets collapsedMarket forces are correcting S & DGetting back on the traditional appreciation
track we were on
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If you bought before 2000. . .you had a paper appreciation. .and a paper loss. . .
but in the end you’re back on track